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SDL and Idiom: A marriage made somewhere warm?
Monday, February 11, 2008 — posted by Sarah
[corrected stupid math error]I was talking to someone from SDL about Idiom a few years back. "We hate their %$#!%$#@! guts," he told me. I never found out whether this was because Idiom was taking sales from SDL or because, I dunno, this person hated words that start with I or something.
But today, we have the announcement from SDL that they are acquiring Idiom for $22 million (plus another $5 million in assumed debt). Why did Idiom agree to the sale? They weren't exactly printing money (and perhaps that was the only other viable alternative).
Idiom’s audited revenues for the year ended 31 December 2005 were $7.9m (2006 unaudited - $10.0m), generating an audited loss before taxation of $5.9m (2006 unaudited loss - $5.3m).Let's translate. The company lost $5.9 million in 2005 and $5.3 million in 2006 as revenue increased 25% over that period. Not good.
Based on the revenue multiplier or 2.7x ($27 million sale price/$10 million in revenue), this looks like a sale based on services rather than products. In other words, SDL is picking up Idiom for their expertise and consultancy and not primarily for their software.
Idiom had investor backing. It looks to me as though the investors were none-too-happy with the growth rate and forced the sale.
As a business owner myself, I hope that the principals got something out of this, but based on the information I have, I kind of doubt it.
(via Gilbane)
Labels: business, localization
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